Tell me why averaging down is a bad idea .

Here is a video of something I am working on that scales in/averages in up to 10 NQ contracts and uses a $2,000 puke up point. It will run till market close earning whatever it can or hit the $2k loss for the day. The replay is running at 120 times speed so nobody gets bored. The ending total is net after commissions. Enjoy!

 

It won't work, because you did it on a sim account. Live is a completely different ballgame.

 

Try averaging down, but also playing Long and Short same time, actually no you'll book small profits and grow losers to many times the size LOL

Averaging down, works to a point IF your method suites it or in sideways choppy markets where it's never going to run free and wipe you, until it does ofcourse

 

During the down period, it may good to average down(or DCA) on index ETF. Why not to average down on an individual stock? It could go bust. High chance that an index ETF like SPY would not go under.

 

Remember remember the 5th of November.

 

Over how long a time frame is that? I've seen many mean reversion systems have good runs for a while (even a few years) but they either go bust or become unprofitable over time. It's an interesting idea, but I'm sure the smartest, most well-capitalized funds would've data mined that idea years ago and made untold billions with it....if it were really that easy and worked long term.

 

If it wipes you out it is because you let it.

 

Volpri, come one man! You KNOW it will eventually fail, bigly. If it did ever work, I would have called it today! But I learned MY lesson back in August of 2015. Averaging into futures will lead to failure and blowouts. Stat.

 

Maybe I missed it but did you mention how much you add as it goes against you? If you add small increments, makes little difference. If you add a lot (like doubling), you are sinking and adding weight. This is how bad habits form. Trust me

 

That is not the best situation trading whether day trading or swing trading, letting 1 contract go against you 1000 or 1500. You got the direction wrong long ago. You should have dumped it and waited for a better opportunity IMO. What is 48 hours to a swing trader? Answer: a loser if you hold it. If you got 300000 to trade with then maybe not so bad but if you are doing this with a 5000 or 10000 account it doesn't make sense. IMO that is.